Are e-signatures legally binding?

The digital era of today provides an array of services at our fingertips faster and easier than ever before. Cloud-based services enable us to access information from multiple devices wherever we are. Products can be purchased from around the world and delivered to our doorstep in a matter of days. And now, we even have the convenience of finalising agreements and other documents with a simple electronic signature. No longer do you have to be physically present to sign a document, which means that doing business with others across the country, a few miles away or on the other side of the world can be accomplished with ease with an e-signature. But are e-signatures legally binding? 

What Is an E-Signature?

A written signature will always be the “golden standard of authenticity,” but an electronic signature is now accepted with the appropriate accompanying documentation. The electronic signature is basically created with the use of a pen, stylus or even your fingertip to sign your name just as you would on a piece of paper. The digital version of your signature is legally binding.

The legal recognition of E-signatures offers several benefits, as we’ll review here.

Higher Security

With the use of e-signatures, your identity is more easily protected. They replace the physical documents, which could be altered, misplaced or copied. As long as electronic files are safeguarded with security measures such as encryption and password protection, the possibility of being erroneously accessed is significantly reduced.

More Cost Efficient

The use of e-signatures reduces costs for businesses and is better for the environment. The e-signature reduces the amount of paper used, which is eco-friendly and the typical expenses incurred from costs of paper, printing expenditures, along with the fees of shipping and handling add up quickly. Additionally, the man-hours required for document production cost money as well.

Requires Less Storage

The electronic age supports a tremendous reduction in cost of materials and physical storage. When taking into account the number of years that archived documents must be retained, the space required can increase quickly. Further, the digital storage increases safety of confidential documents.

Increased Efficiency

Whether working in real estate, law office or accounting firm, contracts and documents are the crux of business. The e-signatures and digital access increase efficiency and systematize multiple processes. Details can be reviewed, agreed upon and finalized with much less effort, which in turn speeds up the monetary processes.

The conveniences of e-signatures are being recognized and used more frequently than ever. It is a great way to improve efficiency and customer service and becoming commonplace for multitudes of SMEs. E-signatures are widely accepted among businesses and Singapore implemented the Electronic Transactions Act in 2010, which provides official agreements for the conveniences of businesses and individuals.